Universal Basic Income (UBI) is meant to provide financial security and address job losses. Africa is one continent where UBI is critical. During the COVID-19 outbreak that has rendered many people jobless, it could have been used to prevent them from sliding into poverty.
Universal Basic Income is unconditional cash transfers to recipients guaranteed by the government. Recipients are entitled to the income regardless they are earning or not. The universal basic income is not taxable and recipients can use it for any of their needs. The government has no obligation to follow up on how the payment is used.
Currently, there is no country with a Universal Basic Income in Africa, but there are schemes that can help transition toward a UBI policy. There have been trials in some countries in Africa, such as Kenya, Uganda and Namibia. The trials that were conducted in the three African countries showed positive results. What benefits can we expect from a universal basic income in Africa?
Eliminate Poverty by Generating Income
By introducing Universal Basic Income in Africa, recipients can improve their financial status from low-income earners to medium-income earners. The recipients will have more disposable income to cater to their needs.
This would have been beneficial at the time when many Africans have lost their jobs due to the COVID-19 pandemic. Basic income will help to support families and prevent them from sliding into poverty.
Ease of Access to Education for Children
With the guarantee of basic income, children can access education without having to work to support their parents. The lack of income leads to increased school dropouts and consequently early marriages.
Children drop out of school to help their parents generate additional income through informal employment. When casual jobs are not available, children get married early to seek solace and financial support from their spouses.
Providing basic income would help children stay in school since they do not have to look for employment to support their families. While children are in school, early marriages can be eliminated and help them gain an education and live a dignified life.
Promote Entrepreneurship and Increase Job Opportunities
Through UBI, people will have access to more disposable income. When people have access to disposable income, they can take risks and start businesses.
Starting a business requires some capital and enough funding before it can start generating revenue. Basic income can be directed to startups since the government needs not to follow up on how it is used.
The impact of basic income is that people can take risks and start businesses that will consequently create job opportunities. Companies will also help the economy through corporate taxes and income taxes.
Improve Mental and Physical Health
Basic income helps people lead a better life, improving their physical and mental health. The lack of disposable income to cater for the basic needs leads to stress and depression, pushing people to live in deplorable living conditions. Moreover, the lack of income hinders people from accessing health insurance.
The same way the government provides free health and education, it is also best that African governments invest in UBI for the financial security of their citizens. With disposable incomes, recipients can secure health insurance and live a dignified life.
A study carried out by GiveDirectly Organization in 63 Kenyan villages, provided each adult 0.75 dollars per day. The results of the study showed that recipients had an improvement in consumption and well-being. The recipients increased their investments in livestock and home improvement.
Financial and Social Inclusion
The problem of social inclusion is rampant in Africa. The lack of basic income leads to social marginalization, preventing people from accessing modern services like insurance, bank services and technology, such as access to mobile phones.
UBI would help to alleviate social marginalization by assisting people in accessing modern services.
For instance, the government can remit basic income through banks or mobile transfers. As such, people will open bank accounts and buy mobile phones to receive the money. This way, marginalized people can enjoy modern services.
Reduce Financial Gaps between the Rich and the Poor
One of the ways to fund Universal Basic Income is through taxes. Income taxes can lead to a fair distribution of wealth by taxing high-income earners and reducing wealth gaps. Africa is the leading continent with huge income disparities between the high-income earners and low-income earners.
Low skilled workers barely get incremental increases in their wages, pushing them into adverse poverty with increasing inflation. Through UBI, the government can tax high-income earners and redistribute the proceeds to low-income earners.
Family Cohesiveness and Stability
In many African countries, there is domestic violence due to the inability to cater to family needs and depression. The survivors of domestic violence cannot leave their spouses because they lack a stable income. If the survivors can access basic income, they can leave their spouses and meet their basic needs.
Also, if there is a guaranteed income, depression and stress can be eliminated, reducing domestic violence.
In many African countries such as Kenya, parents give birth to many children for cheap labour and security during their old age. If there is a guarantee of regular income, parents would not need to raise many children to support them when they grow old.
How to Fund the Universal Basic Income in Africa
There are many ways through which African governments can fund Universal Basic Income through taxes and creativity. These are some of the ways to finance the Universal Basic Income in Africa.
Reducing Government Expenditures
Reducing government expenditures can set aside some monies that can be directed to fund basic incomes. African governments can reduce some funding to revenue-generating state corporations. Some of the revenues they generate can be directed to the basic income initiative. Most of the recurrent expenditures for government institutions can be halted.
Higher Taxes for High-Income Earners
Through higher taxes from higher-income earners, governments can generate funds to finance basic income initiatives. It would also help to reduce income disparities between the rich and the poor. For instance, governments can introduce a luxury tax and wealth tax above a fixed net worth.
Increase Corporate Taxes and Reduce Financial Benefits to Leaders
African governments can increase corporate taxes by three percent to generate additional revenue for UBI. Additionally, governments can reduce some benefits for politicians. The monies can be redirected to a basic income to promote recipient welfare.
Final Thoughts
African governments should invest in basic income for its citizens. Basic income is equally important in a nation like other social amenities such as health and education. It leads to general wellbeing, social cohesion, and productivity. In addition, by affording basic needs such as food, shelter and clothing, citizens live a dignified life. Finally, basic income will promote mental health. Poverty and social injustice can lead to poor mental health and related illnesses.
Author Bio:
Vincent Nyoike is a Kenyan research writer with vast writing experience. He is a graduate of the University of Eldoret with a degree in Applied Statistics with Computing. He has also pursued a course in Certified Public Accountant. From his experience in business, he enjoys writing on finance and business topics, with a particular focus on Africa. He also works on SEO projects for private international organisations.
From 2008 to 2009 Namibia hosted a globally significant Basic Income pilot project. The coalition behind the project relaunched today to ask for a Basic Income for Namibia.
Speakers at the event included Uhuru Dempers (Desk for Social Development of the Evangelical Lutheran Church (NAM)), Dr. Andre September (Council of Churches in Namibia), Rinaani Musutua (Economic and Social Justice Trust), and Julia Ndaponah Shikangalah, who received a BIG in 2008-09.
I was recently asked four questions about Alaska’s Permanent Fund Dividend, and I think the answers provide a pretty good overview of what people who are interested in UBI need to know about the fund.
1. When was the Alaska policy passed?
The enabling legislation was introduced gradually from 1976 to the early 80s and was altered before it could be it could be introduced because of a court challenge. So, it’s best to focus on when the first dividend was distributed. That was 1982.
2. How many benefits does it provide people?
See this table. Note that it is for every man, woman, and child, so each family receives several times this amount. It usually varies between $1,000 and $2,000 per year. It would be much larger if it hadn’t been for the Governor’s and the legislature’s cuts a few years ago.
3. What was the history behind the policy?
Oil money really began to flow in 1976, just as Governor Jay Hammond took office. He used the power of his office from 1976 to 1982 to make deals with the legislature to create first the fund and then the dividend. The fund idea was popular, but the dividend wasn’t until it was introduced. Hammond had a few allies in the legislature, but it was very much his single-minded pursuit of the dividend that made it happen. He did it because he knew oil revenue would be temporary and he wanted to make sure every Alaskan benefited from it. Mexico, for example, has exported a lot of oil, but it’s hard to say whether the poorest people have benefit from it. All Alaskans–including homeless people–have benefited from Alaska’s oil exports, via the fund.
But the fund and therefore the dividend are about 1/8 to 1/4 the size Hammond wanted. So, the dividend could be 8 times what it has been in the table, and it could be even larger without the recent cuts. Imagine that—$4,000 to perhaps $12,000 year for every man, woman, and child.
Almost as soon as it was introduced it became the most popular government policy in Alaska, and was considered untouchable until about 4 years ago when Alaska’s oil revenue began to collapse, and politicians who had failed to plan for that day began raiding the fund to avoid reintroducing the state income tax or raising other taxes. Had they kept the income tax, and saved all or most of their oil money–as Hammond wanted–the state wouldn’t face a fiscal crisis as oil revenue declines, and they’d feel less temped to drill in the Arctic Wildlife Refuge.
4. Has it proved to be effective?
Yes, if an impoverished family of four receives $8,000, that’s not enough to live on for a year, but it’s enough to make an enormous difference. In the first 20 or 30 year of the program, Alaska was one of the most economically equal states and the growing PDF was probably one of the reasons. It’s helped Alaska maintain a much lower poverty rate and poverty gap than it would otherwise have. -Karl Widerquist, on my front porch in New Orleans, Louisianan, 20 August 20, 2020
For more information about the fund see these two articles:
Karl Widerquist, 2012. “Alaska’s Permanent Fund Dividend: Basic Income in Practice,” Democratic Imperatives: Innovations in Rights, Participation, and Economic Citizenship. Report of the Task Force on Democracy, Economic Security, and Social Justice in a Volatile Word, American Political Science Association (ed.). Washington, DC: The American Political Science Association (April), p. 64
September 14, 2020, is the kickoff day for the 13th International Basic Income Week (IBIW). Our goal is to have a coordinated global effort and a big presence in many countries. As the banner indicates, this year’s motto will be ‘Freedom to Choose’.
2020 has presented us with major protests around the world seeking more social justice. Starting with Black Lives Matter, the protests went global with a message of enough is enough, governments have to more realistically reflect and serve society. Different countries had different touch-points, but all of the protests focused on social justice with equality being a primary focus. As we all know, equality encompasses vast swaths of societal endeavours but a lack of money is the biggest determinant in changing the focus and outlook for most of those endeavours.
The third week in September offers us an opportunity to put Basic Income front and centre to showcase the richness of the movement and message in all parts of the globe. We know that everyone as an individual and as members of larger groups want their voices heard and have ideas about how to advance their messages and their voice. International Basic Income Week offers a venue to everyone to have their say in conjunction with a world-wide contingent. Everyone can let the world know that they are part of a larger global voice advocating for a floor that each of us can stand on and reach out confidently to the future.
The #countonbasicincome tag has been used for several years to focus social media on the movement. We again encourage everyone to use that hashtag to showcase the activities they are planning and to let everyone know about them.
Write or generate some global COVID-19 basic income content to post on the IBIW website (e.g., collect stories from people around the world, perhaps via video, about how COVID-19 has changed the financial situation in each country, and if there are any basic income or basic income-like petitions and how they fared).
Most importantly, enjoy some time with people who are equally engaged and desiring a change so that everyone starts with a level playing field.
Fraichement composé, le gouvernement de la 33ème chambre basse du parlement irlandais s’est engagé à expérimenter le Revenu de Base en Irlande pendant les cinq prochaines années. L’annonce a été faite dans le Programme de Gouvernement porté par les partis Fine Gael, Fianna Fáil et le Parti Vert. Le document énumère une longue liste d’actions que le gouvernement veut mettre en œuvre, dont l’engagement à inclure le Revenu de Base, au titre des « Mesures de lutte contre la pauvreté et pour l’inclusion sociale » –cf page 86 du document-.
[Nous allons] demander à la Commission des bas salaires d’examiner le Revenu Universel de Base, sur la base d’une étude préalable de la synthèse des expériences menées dans d’autres pays et ce pour permettre une expérimentation pendant que ce gouvernement actuel sera en fonction.
Si le plan est mené à bien, l’Irlande grossira les rangs des pays qui ont commencé à élaborer des plans concrets pour créer telle ou telle forme de Revenu de Base. Toutefois des questions ont été soulevées sur la fermeté des engagements pris et sur la manière dont ils seront concrètement déployés.
Anne Ryan, Coordinatrice associée du Revenu de Base en Irlande- l’instance nationale de promotion du Revenu de Base- a commenté :
Nous aimerions voir cette annonce comme une composante d’un engagement à mettre en œuvre un revenu de base permanent pour tous dans les cinq prochaines années.
Des expérimentations et des projets pilotes ont déjà été réalisés en Europe et dans le monde et tous ont fait la preuve de leurs effets positifs. Le choix de repartir dans un mode expérimental en Irlande pourrait ne pas être la meilleure solution, ni la meilleure utilisation du temps et des financements, étant donné qu’il est déjà avéré que le revenu de base est un élément essentiel et structurant d’une société du prendre soin et d’une économie sensée, piliers d’inclusion et d’égalité.
D’autres préoccupations ont été exprimées au sujet de la décision de nommer la Commission des Bas Salaires en tant que garante des engagements, et du risque que des affrontements politiques internes pourraient faire courir sur les expérimentations envisagées.
Le Programme de Gouvernement prévoit de confier à la Commission des Bas Salaires (Low Pay Commission : LPC) l’examen du Revenu Universel de Base. Les questions relatives à la définition du plancher minimum en dessous duquel le niveau de vie de ses citoyens ne devrait pas glisser vont bien au-delà des attributions du LPC. La Commission du bien-être social et de la fiscalité serait un interlocuteur bien plus approprié sur ce sujet (p. 3).
Toute décision de déplacer l’examen du Revenu de Base vers un autre organe nécessiterait un consensus entre les trois partis, et bien que Fianna Fáil et le Parti vert aient précédemment affirmé leur soutien au Revenu de Base, Fine Gael en a systématiquement rejeté l’idée.
Le Dr Seán Healy, PDG de Social Justice en Irlande – qui promeut le Revenu de Base en Irlande depuis 35 ans – a ajouté:
Il faut veiller à ce que cette initiative ne soit pas abandonnée en raison de l’opposition d’un seul parti politique, alors qu’une majorité du gouvernement est prête à lui donner toutes ses chances. En 2002, le Gouvernement irlandais a publié un livre vert sur le Revenu de Base qui était relativement positif – il est impératif que nous ne répétions pas les erreurs du passé pour que cette proposition soit examinée de manière équitable.
La manière dont les engagements du Programme de Gouvernement vont se matérialiser dépend beaucoup de l’examen des propositions et de la forme que prendra l’expérimentation. L’accent doit être mis sur la garantie que tout se déroule dans un esprit positif, sous la houlette de personnes qui ont un intérêt sincère à faire advenir le Revenu de Base.
